Committee dampens fracking hopes

Fracking for shale gas is not guaranteed to provide the "silver bullet" needed to solve Britain's high energy bill woes, according to MPs.

The Energy and Climate Change Committee said it was "too soon to call" what impact the potential energy source could have in the UK but added companies must be able to "get on and drill" to establish what resources exist.

Although extraction has led to big energy cost reductions in the United States a similar "revolution" in the UK is not certain, MPs said. They warned government not to base future energy policy on future shale gas production. Energy committee chairman Tim Yeo said: "It is still too soon to call whether shale gas will provide the silver bullet needed to solve our energy problems. Although the US shale gas has seen a dramatic fall in domestic gas prices, a similar 'revolution' here is not certain.

"If substantial shale resources do turn out to be recoverable in the UK - and community concerns can be addressed - then it could limit future energy price rises, reduce our reliance on imported gas and generate considerable tax revenues. The Government has dithered on this issue and should now encourage companies to get on and drill, to establish whether significant recoverable resources exist."

Shale gas is exploited through drilling into rock and fracturing it with high pressure liquid to extract the gas, in a process known as fracking. Supporters say shale gas production in the UK could provide a cheap, secure source of energy, but opponents are worried about the possibility of earthquakes and water pollution caused by fracking.

The committee concluded that it is "impossible" to come up with reliable estimates of shale gas in the UK without practical production experience so companies that meet the required standards should be encouraged to carry out exploratory work, although public concern must be taken into account.

Importing shale gas from the US is unlikely to reduce British bills because the shipping costs are too high, the Impact of Shale Gas on Energy Markets report said. It adds that, while shale oil is likely to be present in the UK, it remains uncertain whether it is economically worthwhile to explore.

Greenpeace Climate Campaigner Leila Deen said: "This report confirms that what we know about UK shale gas is that we don't know much. The only thing most experts agree on is that it won't reduce bills. Fracking remains a fantasy and a dangerous distraction from renewables, which continue to fall in cost. The Government needs to start backing energy winners, instead of gambling with consumers' pockets and the climate."

Energy Minister Michael Fallon said: "This report is helpful analysis, it underlines what we know - that UK shale has potential to play a role in our energy security and to create valuable jobs. But the scale of future production and the impact it will have on prices is not yet clear. We have already set up the new Office of Unconventional Gas and Oil to promote the safe, responsible and environmentally sound recovery of the UK's reserves."

Ken Cronin, chief executive of industry body the UK Onshore Operators Group, told BBC Radio 4's Today programme: "We welcome the report and the central message that we need to be allowed to get on with the drilling. We need to get drilling to get practical experience and to understand the geology and the flow rates we have in the UK. What we now need to do as an industry is work out what is technically and economically recoverable, but we believe there is a significant amount of gas in the UK."